The 2015 Budget: Last one out, please turn off the lights...

Post by Mark Purdue, senior product manager – Digita Tax Software, part of the Tax & Accounting Business of Thomson Reuters

On Wednesday, the Chancellor, George Osborne, gave his last Budget before the General Election in May. Whilst perhaps a little light on real content, the key headline for those in the accountancy profession was the scrapping of the tax return.

What does this mean to the practitioners? Is the profession as we know it, for tax compliance at least, dead?

I’ve read a lot of comments on forums from those who believe that it’s the beginning of the end. Others comment that they only see opportunities.

But before we all dust off our CVs and pack our bags, let’s take a look at the detail.

Firstly, there’s very little detail – a consultation process will commence later in the year, when the Government will also publish its roadmap of proposed changes.

Secondly, this really shouldn’t be a surprise to anyone in the profession. I’ve written previously about HMRC’s plans to digitise Self Assessment, and this recent announcement is merely releasing that information into the wider public domain. This has been on the horizon for a number of years.

So in these proposals, is there a benefit to the profession? In a nutshell, yes.

Those predominantly dealing with compliance only receive historic information. That new employment/promotion that made a client higher rate, the sale of property at a large gain when the client had unrealised losses – these are events that the agent finds out about when it is too late to rectify. With this proposal, you will be notified on such events and be able to give near real-time planning to avoid or rectify mistakes. You’ll have an active role in managing your clients.

But are you going to have any clients left, being as this online account is so straightforward? Again, yes. There may be the odd casualty along the way, but a client who doesn’t understand tax today, still isn’t going to tomorrow. Those too ‘time poor’, will still be too time poor... not to mention the majority of clients who just don’t ‘fit’ into a simplified online world (partnership income, most traders, loss claims, gift aid, CGT, foreign, non-residents), and those wanting or requiring simple management and advice will not get it anywhere else.

But the possibilities don’t end there. Now we’re on the realm of ‘Big Data’ we can collate and use it for good. Currently you may write to all clients to remind them about their ISA subscription. In the future, you’ll be able to see which client has not made their subscription (as at a few seconds ago) and give targeted bespoke advice to just those clients. Just one example of how you could add value.

Certainly, the landscape is changing, but we’re not done yet. Remember the naysayers believed that the introduction of Self Assessment would kill the profession, and we’re all still here.

Do you have any thoughts or questions on how the Budget changes will affect the accountancy profession and tax compliance work? Please comment below.